If this rep has an excellent reputation, has found
major distribution for films similar to yours and the
"retainer" is reasonable, then it can be acceptable.
Do you due diligence. Find out what films this rep
has placed and how much they have made for the
filmmaker. If they don't want to tell you then take
sonnyboo's advice and run away. If that have only
place movies with names then take sonnyboo's
advice and run away. If they don't have a track record
of placing movies in theatrical release then take
sonnyboo's advice and run away.
Now yours might not be a theatrical release picture,
and that's fine, but make sure this rep has the connections
and clout to get movies in theaters. Make sure they have
connections and clout with the major DTV distributors.
They are not doing you a favor. You are paying them to
perform a service. Check them out as carefully as you would
a car mechanic. You would never pay a mechanic a retainer
up front on the promise that they might fix your car.